Question

What is the PV of an ordinary annuity with 10 payments of $2,700 if the appropriate interest rate is 5.5%?a. $16,576b. $17,449c. $18,367d. $19,334e. $20,352

Answer 1

Answer:

PV = 20,351.59

Explanation:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV$

C = installement/payment = 2,700

rate = 0.055

time = 10

$2,700 \times \frac{1-(1+0.055)^{-10} }{0.055} = PV$

PV = 20,351.59